Innovative entrepreneurs are those who operate businesses that support growing population. The innovative entrepreneurs create and commercialize new products, services and business practices.
Sander van der Leeuw, Professor and Director of ASU’s College of Human Evolution and Social Change, just finished work on a four year interdisciplinary study funded by the European Union that looked at the role of innovation as a driver of urban growth, and at innovation in Italian business districts. Innovation and competitiveness increases when entrepreneurs that are similar or complementary operate in a cluster environment, the study found. Proximity to other entrepreneurs enable innovators to see a bigger picture.”You invent a widget that you need,” Van Der Leeuw postulated, “but within your network others see possible modifications” changes that make the widget valuable in ways that you never imagined. Therefore, the size and nature of network is of importance in determining whether invention will indeed succeed in the marketplace.
Accordingly, Van Der Leeuw states, the important question is, how does a business network form? Who links up with whom? Do they compete or cooperate or both? And who opts out? Innovation can be stimulated strategically, he believes, and universities and governments can play significant roles. An entrepreneur in Spain was able to invigorate a regional economy that had consisted mostly of cobblers. He lined up government support to establish an institute that helped the cobblers learns new techniques and provided the technologies that enabled them to develop new products. He came up with the investments that served everyone yet that no one could afford.
Innovative entrepreneurs create and commercialize new products, services and business practices, in difference to the other entrepreneurs those who open businesses that support a growing population. Innovative entrepreneurs impact economies in very different ways of economic development. As a result of this, the dynamics of entrepreneurship should be weighed.
As economies approach the technological frontier, economic growth rates decline since replication can no longer enlarge GDP per person. Consequently, to grow the standard of living, it is a must to increasingly transition to the innovation. There are really no tried and tested exact prescription for generating an innovative business. However, it is clearly imperative to engage the methods that are known to work from building necessary infrastructure to supporting higher education and offering tax incentives.
The existence of innovative entrepreneurs varies significantly changes over time. Innovative entrepreneurs impact economies in very different ways at different stages of economic development. Because of this, the dynamics of entrepreneurship should be weighed vigilantly.
Growth generally follows a fairly common process across countries and geographic regions. In the early stage of development, resources flow out of very basic agricultural production into other economic activities, most frequently manufacturing. Since manufacturing enjoys higher levels of productivity relative to agriculture, the flow of resources increases the output produced per person in the economy and, correspondingly, the standard of living improves.
The manufacturers rely entirely on entrepreneurship. They borrow techniques from others and often use typical capital equipment. Unavoidably, the entrepreneurship process introduces new sophistications allowing the economy to progress further while at the same time, new low cost competition enters from other developing areas and takes over the less sophisticated production.
As economies approach the technological border economic growth rates decline as replication can no longer increase GDP per person. That is since a given production process without innovation can only produce the same amount of output per worker. Without innovation, economies can maintain a certain GDP per person. In addition, even maintaining that standard of living becomes challenging since newly developing low cost producers enter the market. In the event economies are to grow beyond this standard the more difficult process of innovation is required.
In order to grow the standard of living, there must be increasingly transition to the innovation phase. Sometimes the difference between an innovative venture and a replicative one is subtle. “Innovative entrepreneurship may cover what has been tried and has failed in the past” Professor Albert Cannella, has stated.
Marketing Professor Rajiv Sinha states that there are really two parts that go into innovative entrepreneurship, one is the invention with a new idea for a good or service. The other is successfully converting that idea into a product or service and enter into the market. Electric car that really worked and was well accepted by consumers would be an innovation. Even though electric cars have been produced or invented before, they have yet to be successfully entered into the market.
There are innovators who develop new technologies, like we are seeing right now with biometrics. There are innovators like Michael Dell who pair existing technologies with a creative business model and there are entrepreneurs who find innovative ways to improve applications of new and existing technologies.
Entrepreneur innovation is that they all continue to innovate to sustain their business. Motorola began by making converters and has transitioned from there to car radios, to mobile radios, to TVs, to stereos, and to cell phones. Confronted with new low cost producers for its existing products the company would have failed in the event it had not continuously innovated.
However, for the entrepreneur looking to innovate, whether by developing a new good or service, employing a new business model, or applying existing technologies in new ways innovative entrepreneurship impacts the economy at three levels at the aggregate level, at the consumer level, and at the firm level. The positive effects of innovation percolate through the economy.
At the aggregate level that innovative entrepreneurship benefits the overall economy by creating new jobs and increasing income, raising the potential for new investments. Innovative entrepreneurships add value and improved products or services available to consumers at lower costs.
At the firm level, innovators can successfully compete with other companies that are not innovators, because of the cost advantages that innovation produces. In addition, firms that produce innovative goods and services are also more likely to adopt new innovations. Necessary factors for an innovative economy are minimal regulations, a competitive and economically efficient tax system, capable of supporting an appropriately competitive infrastructure, openness to trade and competition.
In order to cultivate innovative entrepreneurship, it is necessary to have large innovative companies. A lot of innovative entrepreneurs get their technical experience working for a large company. Once they come up with the innovative idea, they leave the entrepreneur to go out on their own. There are two types of education that innovative entrepreneurs need to be successful, on one hand, they need a really solid technical understanding, and on the other hand they need an education that rouse creativity.
Innovation involves changing the status quo with respect to customer experiences, product performance, business processes, alliances, and the channels of distribution or the way the product or service is ultimately delivered to consumers. Therefore, teaching innovation is not just about teaching students how to develop new goods or services, yet how to explore their ideas, and develop their latent potential for innovation.
In the end, there is really no tried and exact prescription for creating an innovative entrepreneur. Nevertheless, it is clearly important to engage the methods that are known to work from building necessary infrastructure to supporting higher education and offering tax incentives to finally raise standards of living of the people.